Category: Simplifying

  • Take the 30-day, buy used, challenge

    Take the 30-day, buy used, challenge

    actually thrift

    Okay, here is an exercise.

    Let’s say that something bad happens — some financial catastrophe — and you need to come up with an enormous amount of money quickly. And for the sake of this exercise let’s also say that you have already tapped into your savings, your 401K, your lines of credit, cash advances and anything else you can think of. All the traditional methods are exhausted and you still need cash. A lot more. So now all that is left are your things. Your stuff; the things you own. All that you have to sell are those very items you see and use everyday.

    But how much are those things worth? — not how much did they cost, but how much are they really worth? — because a baseball card might have a value of a thousand dollars but until someone puts that amount in your hand, its value is undetermined.

    In this financial scenario, if you had to sell all the things you own, outside of owning a box of gold coins or having a few Corvette’s in your garage, the true value of what we have — meaning what someone else would pay us for them — is actually very small.

    Our flat screen TV may have cost three grand, but if no one is going to give us  three grand for it — especially if it’s a few years old and is no longer the hot technology — it’s probably worth a hundred or less.

    Outside of owning luxury items or precious stones and metal, the contents of an average four bedroom home would sell in an estate sale for $6,000.

    Not bad. Except that the replacement cost of those same items would be  $20,000. Meaning what we pay $20,000 for items that have a street value of $6,000.

    Here’s an example. A few years ago I splurged and bought my wife a very nice gold chain — a jewelry store near our home was having a big sale and a 14 carrot gold chain that would normally be $1,200 was now $800.00. So I bought it. And just out of curiosity — just because I wanted to gloat on what a bargain I had gotten — I stopped at a pawn shop on my way home. I said that I might be interested in pawning the piece and wanted to know how much I would get for it. The gold was tested and weighed and an offer was made.

    $140

    My $800 purchase had a true value of $140.

    Now, I might have found a slightly higher offer at another pawn shop. Maybe. But the highest offer someone had given me was $140 so that was the current value.

    I still gave my wife the necklace — it was a gift and it was not about the money — but it did get me thinking.

    Now this discussion is not about how to get the highest dollar for your things when you sell them. It is demonstrating that anything we buy new — and I mean anything —- the value depreciates just like a car. A $200 microwave has a resale value of around $50. A $100 vacuum cleaner would sell for $30 and a $600 lawn mower would get you about $75. That is the true value of those items.

    So here is the challenge. Take a month and be resolved to be on the other side of this curve. For one month. For thirty days. Vow to buy all the items you need — every coffee maker, every shirt, every book — used.

    Instead of running to Wal Mart on your way home — stop at The Good Will instead. And when you need to swing by Radio Shack, hit the local Pawn Shop. Instead of Target, pick up a few things at The Thrift Store or scan Craigslist.

    Just do it for thirty days — it  won’t be as convenient and it may take some patience — but vow to do it for one month.

    And let me know what happens.

  • How to Create a Budget

    How to Create a Budget

    budget

    When my wife Debbie and I were first married, we were on a very strict budget — I mean a death grip budget — where every dime was needed and every penny was accounted for. And even though we were extremely strict with our money, we didn’t go without. We didn’t go hungry and we didn’t go in debt. In fact, it was not even a difficult financial time for us but more of a disciplined one; a lean but happy one. And actually it was because our household budget was so severe that this was an extremely secure and safe time for us — because no matter what happened financially, we had a budget envelope set aside for it.

    Now, my routine at that time was pretty set as well. Every payday I would leave work at lunch to cash my check and when I did, I had the guilty pleasure of peeling off the very top seven dollars — we had calculated both our checks down to what was needed and mine held an extra seven bucks in it — and I would get to just blow that money. The bulk of the check was converted into cash to be taken  home and placed in the various envelopes where it was needed but that first seven bucks, that top seven bucks, was all mine, baby. And that meant I could spend it on — any — thing — I — wanted.

    And I did.

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    It took me about nine minutes.

    Because the bank we used on Court Street in Binghamton, NY was only a block away from the greatest delicatessen north of Flatbush: The Old World Deli. And every Friday, I would wait in line with the downtown lunch crowd along with the smells of pastrami and corned beef and I would order a sandwich the size of my head, a pickle and a drink. And even though I would try to make the lunch last, even though I would try and savor it, the meal would be over in less then ten minutes. And once again I would be broke.

    Happy, but broke.

    Now this type of severe budgeting is not a great way to plan because it breaks the first financial rule of, pay yourself first — and pay yourself more then seven dollars. And it also shows what happens when you are ultra strict about your finances — and what happens when you do get a few bucks in your pocket.

    But, it worked for us.

    CASH IS KING.

    Now, the best and most pure method of creating a budget is to use a cash system. A simple cash envelope system — separate envelopes marked with each budget area and then placing the cash needed in each envelope — is the best method by far. No math errors. No confusion. If you don’t have enough money in the envelope, then you don’t have enough money for that item.

    However, whether we like it or not we are very close to becoming a cashless society. Our paychecks are directly deposited. Many of us pay bills electronically and other items we need we use our debit or credit cards — and electronic bits and bytes bounce back and forth where dollars and coins once did. In fact many economists estimate that paper checks may be completely obsolete by 2020.

    On top of that, we are becoming a society that is not only e-payment friendly, but is actually becoming cash-resistant. Because the business world doesn’t want you to use cash.

    Why?

    Well, from the merchant’s perspective, the less cash a business takes in means less risk of error or theft. It also means there is less need to make physical bank deposits and if you are purchase from a line of credit, then your buying power has increased. So a merchant sells less to those using cash than those using a line of credit.

    From a banking perspective, credit card interest is a financial goldmine but even using debit cards make banks a lot of money — I mean a lot of money. Because every time you use your debit card as a credit card, the merchant pays a bank fee. And every time you use the debit card as a debit card, the bank will either charge you a POS (Point Of Sale) fee, or build in a monthly cost into your account. In fact, many banks are raising these POS fees to discourage consumers from using the cards as debit cards, because they can make so much more income by charging the merchants for the credit transaction.

    And from a consumer perspective, it’s simply becoming easier to use credit or debit cards. We can now use cards in vending machines, in parking meters and many stores have drastically dropped — or completely eliminated — purchase limits on credit and debit cards; which means we can buy a pack of gum or a soda and put it on a card. And since our payroll is often direct deposited anyway, using the debit card from our account just saves a step of running to the bank or ATM.

    So how do we create a cash budget in a cashless society?

    Well, the best way to do this is to use cash in those areas that we have the most flexibility — and therefore the largest margin for error.

    HOW TO CREATE A BUDGET.

    1. Gather data going out. Grab all your bills, statements, account data and begin listing all your expenses — and not only monthly expenses, if you pay something once or twice a year you need to take a portion out for that monthly. Include in this list everything; car insurance, mortgage or rent, car payments, entertainment, groceries, utilities, dry cleaning, garbage services, car maintenance, retirement or college savings, vacations. Everything.

    2. Gather data coming in. List all the monthly income. Record all of your sources of income — if you do something once or twice a year that earns income include that along with your regular income.

    3. Breakdown expenses. Everything you owe is in one of two categories. It’s either fixed — meaning it is the same payment month after month — or its variable — meaning the expense can change, such as  groceries, entertainment, vacations, etc. Use cash for all your variable expenses.

    4. Total everything. If your total for expenses is less than the total for income, good. We’re off to a great start. This means you will have some wiggle room to whittle down any debt you have or save and invest. If your list shows more expense going out then income coming in, you’ll need to make some changes. Usually this is tied to a high debt load, so look at that first and see what can be done to reduce it.

    5. Adjust, adjust, adjust. It will take about three months to tweak your budget so it works for you. There will be items you forgot or things change. The more accurate the budget is, the more of a tool it will be for you.

    And remember a high income is not needed for financial security — the more you budget and stay out of debt, the better you will be. My cousin, Rena, was the sole breadwinner of her family. She bought a house, raised two kids, put them both through college and has a nice retirement lined up, all on the salary of a McDonalds Manager.

  • How to build a Hobo Stove

    How to build a Hobo Stove

    hobo

    If you are under the age of eighty, then you — like most of us — have not lived through a true worldwide economic depression. Oh, we have all seen economic challenges — layoffs, rightsizing and recessions — but few of us were alive to experience the prevailing effects of The Great Depression of the 1930’s.

    During this time, jobs did not simply become scarce, they just vanished. Banks collapsed. Manufacturing stopped. Crop prices were cut in half and virtually overnight the country changed and remained changed for nearly a  decade.

    Imagine what happens when a country of men wake up and in spite of their best intensions and efforts, they can no longer take care of themselves or their families. Over time, the strain broke many of these men — because underneath subsistence is survival but underneath survival is hopelessness.

    Very few of us know what it’s like to live in a world when money was not simply hard to come by, but for many American’s it just didn’t exist any longer. Bartering became a common method of commerce and many people simply worked for food and shelter.

    Ironically, the group of people that faired the best during this time was the  American farmer — those located outside of the dustbowl Midwest. Even with low crop and meat prices, the American farmer had enough food for his family as well as had goods to trade with.

    With these farms surviving, migratory workers would travel and seek out the seasonal seeding and harvest work available. This was fueled by the fact that with homes being foreclosed on and with little cash for rent, there were more people living a transitory lifestyle then ever before — moving from town to town seeking what work could be found.

    Now, the most colorful group of travelling men during this time was the American Hobo. The term hobo is believed to come from the phrase ho-boy, referring to the great groups of farm and field workers that competed for migratory work. These men would travel light and stay on the move — often by sneaking aboard freight trains — looking for work, a meal and if possible a little adventure.

    The modern term hobo is often used when referring to anyone homeless but this is not accurate.

    Remember …

    A hobo is someone that travels looking for work.

    A tramp is someone that travels but does not work.

    And a bum neither travels nor works.

    The general philosophy of the hobo — and of many American’s during The Great Depression — was simple: waste nothing, throw little away and make do with what you can find.  And from this, the hobo stove was born.

    Now, there is no evidence that the hobo stove was actually created during the 1930’s. It’s such a simple design — made simply from old cans — and a stove similar to it was used in World War I. But it was commonly used during this period and often associated with it.

    A hobo stove is a simple stove made from discarded food cans — a coffee can is often used but you can build the stove with larger or smaller cans — that allows air to ventilate it and an area to feed fuel in. These stoves are cheap, easy to make, relatively efficient and can be burned at no cost because they burn sticks, pine cones, wood scraps, cardboard, pretty much anything you find along the way. And because they burn pretty much anything, you will never run out of fuel.

    In the modern world, Hobo Stoves are great little devices to have. They can be used during power outages, as a camping stove, while hiking or backpacking, to distill water in or as part of a survival kit.

    Now there are many designs to a hobo stove, but here is a real simple one — and remember, they don’t need to be too pretty they just need to work.

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    HOW TO BUILD A HOBO STOVE:

    1. Find a base can for your stove and a slightly smaller top can. You can make this stove as large or as small as you want. I wanted to build a light backpacking stove here, so I used a spaghetti sauce can for the base and a dog food can for the top, but I’ve seen these stoves made out of large #10 food cans for those wanting full sized camp stove.

    2. With a ‘church key’ style can opener, place some holes along the bottom base can. These are to draw air in and up through the stove — it’s important to have some space between holes though so you have stability at the base of the can.

    3.  With a nail, punch some holes in the side of the can, center, for ventilation, as well as four additional holes  — an inch from the top — for the support pins. The small holes in the center will add some additional ventilation and the four peg holes need to be directly across from each other as the pegs that will support the top half will rest on it. Make sure the holes are equal distance across, as you want this stove to be as stable as possible so the pot on top of it is centered.

    4. Place two pins across the can for support of the top can. Metal tent poles work great for this and you can even use coat hangers but you’ll need to find the thicker, heavy coat hangers to use. A standard coat hanger will be too thin and not work here. Remember, this is where the top can, the pot and a few cups of water will be supported. The ones I used metal from a metal bathroom shelf that I rescued from the trash. I cut off a few tent pole sized pieces, straightened them and bent the edges down.

    5. Cut the bottom out of the top-can so it becomes a metal tube. You can try to use a can opener on some cans but this one had a rounded edge so I just poked a hole in it and then used tin snips. Bend the sharp edges in with pliers.

    6. Cut a “V” shaped section out of the top can. This will be used to feed the fuel down into the stove as well as allow the opposite side of the can to become a wind screen. Bend any sharp edges back with pliers.

    7. Set the top-can down into the bottom-can until it rests on the pins. You want your pins to be across parallel with each other not making an X. Although by crossing them might be more stable, you will be placing fuel down past the pins and don’t want anything to get hung up.

    8. Find the pot you will be using. This should really be done earlier in the process, then you can identify the size stove you want based on the pot you will be using — as well as the place it will be stored. But I got lucky here and found this great little coffee pot in my basement — it had a small pinhole in the side that I patched with some J-B Weld and it worked great. The size of the pot was small enough but the right size so the entire stove fit perfectly inside of it — even allowing room for my silverware, fire starters, and other items to be stores. It’s difficult to tell in these photos, but this pot is very compact and is only 6” high. The perfect size for a small backpacking stove.

    9. Cover stove and pot with high temperature spray-paint. You don’t have to take this step, but by covering both the stove and the pot you are not only protecting it but making it more difficult for the tars and oils from the fire to build up on the surfaces. High temperature spray paint can be found in any hardware store.

    Test your gear. If you need to make modifications it’s easier to do this at home. Try the stove at least once before using it in the field and anything you don’t like, just change and tweak until you have it exactly the way you want it.

    I tried this stove and I had water boiling in about four minutes — using just a handful of twigs and leaves from my backyard as fuel. Total cost ended up being zero because I recycled the cans and pegs and found the coffee pot in my basement.

    Remember: keep the design of the stove simple as you don’t need a device to simmer a five hour brisket in. These stoves were designed to quickly cook a few  stolen eggs before breaking down camp and catching the next freight out of town.

     

    BIG ROCK CANDY MOUNTAIN

    First recorded by Harry McClintock.

    1928

    The Hobo Theme song.

    One evening as the sun went down
    And the jungle fires were burning,
    Down the track came a hobo hiking,
    And he said, “Boys, I’m not turning
    I’m headed for a land that’s far away
    Besides the crystal fountains
    So come with me, we’ll go and see
    The Big Rock Candy Mountains

    In the Big Rock Candy Mountains,
    There’s a land that’s fair and bright,
    Where the handouts grow on bushes
    And you sleep out every night.
    Where the boxcars all are empty
    And the sun shines every day
    And the birds and the bees
    And the cigarette trees
    The lemonade springs
    Where the bluebird sings
    In the Big Rock Candy Mountains.

    In the Big Rock Candy Mountains
    All the cops have wooden legs
    And the bulldogs all have rubber teeth
    And the hens lay soft-boiled eggs
    The farmers’ trees are full of fruit
    And the barns are full of hay
    Oh I’m bound to go
    Where there ain’t no snow
    Where the rain don’t fall
    The winds don’t blow
    In the Big Rock Candy Mountains.

    In the Big Rock Candy Mountains
    You never change your socks
    And the little streams of alcohol
    Come trickling down the rocks
    The brakemen have to tip their hats
    And the railway bulls are blind
    There’s a lake of stew
    And of whiskey too
    You can paddle all around it
    In a big canoe
    In the Big Rock Candy Mountains

    In the Big Rock Candy Mountains,
    The jails are made of tin.
    And you can walk right out again,
    As soon as you are in.
    There ain’t no short-handled shovels,
    No axes, saws nor picks,
    I’m bound to stay
    Where you sleep all day,
    Where they hung the jerk
    That invented work
    In the Big Rock Candy Mountains.